Indian e-tail consumer numbers will touch 175 mn by 2020: Study

The Indian online retail industry is set grow at a robust pace by 2020 as the number of online shoppers will jump three times to 175 million shoppers by then, a latest study conducted by Google and A T Kearney said.

The study says that the top one-third of the customers or the 60 million of the 175 million shoppers in 2020 will be high-value customers

The study says that the top one-third of the customers or the 60 million of the 175 million shoppers in 2020 will be “high-value customers” and that segment will “drive two-thirds of the total spend. Women buyers will also double their share in the online spend to about 40 per cent in 2020.”

Some factors including being able to choose their delivery time, picking up shipment without divulging personal details are things which are expected to increase spend across categories, the survey said. The survey conducted on more than 3,000 respondents further reported that, “one in four women respondents said they will start shopping online if e-tailers also have an offline presence,” giving further credence to the omni-channel retail.

The survey found that men typically purchase consumer electronics, lifestyle and books and media while women prefer lifestyle, consumer electronics and personal care products more.

On the supply side, the online sellers will have to grow by five times in order to cater to the expected surge in demand in the next four years, the study found. Recently introduced government rules that mandates marketplaces with foreign investments to cap sales originating from a single seller to 25 per cent will spur etailers to diversify their seller base.However, this must include education and awareness on the part of the seller about the benefits of going online and financing, the Google-AT Kearney report said.

“Back-end operations and delays in settlement of cash payments” are among the other points of contention which might discourage sellers from going online and which need to be addressed as soon as possible, it said.

Online sales to hold up even without discounts

A majority of Indian buyers will continue to purchase online even if there are no discounts, according to the report.

“As the internet continues to grow, digital presence is paramount for brands and organised retail. Our data reveals that majority of buyers will continue to purchase online even if there are no discounts,” says Partner A T Kearney, Ajay Gupta. “With the right game plan and focussed efforts the e-tailing industry will grow at a healthy CAGR (average annual pace) of 40 per cent +.”

The report estimates that the total number of online shoppers in India will rise to 175 million and gross merchandise value will surge to $60 billion by 2020.

One third of the users will drive 66 per cent of total online shopping spending and online retailing will drive 25 per cent of the total organized retail sales in India by 2020, the Digital Retail 2020 said.